News coming from the Central Bank is a bit worrisome to say the least (see related stories). St. Maarten’s real gross domestic product (GDP) declined by 0.3 per cent in the third quarter of 2016. The drop in tax revenues mostly as a result of lower spending is obviously a major concern for Government too.
Curaçao didn’t do much better either, with zero growth, which is hardly good for the monetary union. What’s worse, visitor numbers there were down even though the hospitality industry has long been identified as the sector with the best prospects.
One of the main issues facing both Dutch Caribbean countries is the relatively high unemployment, in particular among the youth. Measures to reduce such and improve the labour market are deemed essential.
While a lot is often said about combating the misuse of short-term contracts and temporary employment agencies, that’s clearly not the only problem. There are reportedly unique opportunities for more growth, but the latter can only be inclusive with a qualified workforce and higher productivity.
In addition to stimulating economic development, fundamental change addressing current policies and institutions that have an impact on these matters is seen as a requirement for the long run. Also the education system must improve in terms of output, and vocational training is important to teach job skills.
The effectiveness of labour market protection, minimum wages and employment-permit legislation ought to be assessed and possibly adjusted to attain a better balance with the need to remain competitive. This would no doubt be a “hot potato” for local politicians, but then governing a country is no popularity contest.
